Declining ticket sales and "capital needs" contribute to The Rep's suspension | Rock Candy

Tuesday, April 24, 2018

Declining ticket sales and "capital needs" contribute to The Rep's suspension

Posted By and on Tue, Apr 24, 2018 at 10:56 PM

click to enlarge A LONG TIME COMING: Announcement that The Rep would shut down, according to Ruth Shepherd, board chair-elect. - BRIAN CHILSON
  • Brian Chilson
  • A LONG TIME COMING: Announcement that The Rep would shut down, according to Ruth Shepherd, board chair-elect.


In many ways, today’s announcement regarding the suspension of the
Arkansas Repertory Theatre’s operations seemed sudden. A press release indicated that “God of Carnage,” the final play in the company’s 2017-2018 season, would be canceled and that ticketholders would receive a tax receipt for the value of those tickets.

Producing Artistic Director John Miller-Stephany and most other staff members will step down in two weeks. A few staff members will remain onboard through Aug. 3 to manage The Rep’s summer education program, for which it had already collected tuition.


In other ways, the announcement was a long time coming, especially for The Rep’s board of directors.

“Well, The Rep has always been cash-strapped,”
Board Chair-Elect Ruth Shepherd told us in an interview following today's announcement. “We’ve always lived hand to mouth.”

It was devastating, Shepherd stated in the press release, “to vote to suspend operations and cancel the final show of our season, but we just don’t have the money right now. Continuing to produce at the level in which Arkansas audiences have come to expect from The Rep would have put us more in debt.”


Specifically, $750,000 of debt, the theater company’s website states in a sort of FAQ it posted today about its suspended operations. “It’s all of our liabilities at this point in time,” Shepherd said about the figure. “It’s being able to give two weeks notice to our staff. It’s bills needing to be paid. It’s insurance. It’s royalties for the last several weeks of ‘Mamma Mia.’”


“When you don’t have the money to pay your staff or your vendors, who are your partners,” Board Chair Brian Bush said, “you don’t have the ability to move forward. … We have payables outstanding to a number of vendors, utility companies being one.”


The problem? It's manyfold, Bush said. Ticket sales have declined along with charitable giving, making “a perfect financial storm.” In the 2015-16 season, Bush told us in an interview following today’s announcement, “we were probably running [at] about 87 percent capacity. This year we’re somewhere around 50 percent.”

That doesn’t cut it for The Rep, especially not when it comes to musicals. Crowd pleasers like “Mamma Mia” and “Sister Act” might be the bread and butter of a season subscription, but they’re also far more expensive to produce than so-called “straight plays,” which don’t demand polished vocal talent, a pit orchestra or song royalties.


And, Bush said, “If you don’t have people in the seats, then you don’t have people reaching for their pocketbooks. They feed off of one another.” Competition for charitable dollars can be fierce, as anyone who’s been on a nonprofit’s e-newsletter list during an “Arkansas Gives” day can attest.

“People have many opportunities to give their money to worthy causes,” Shepherd said, “and we’re in competition with every nonprofit out there when it comes to paying to come to a benefit or making a gift.”


It might have appeared from the outside, too, that The Rep was on the up and up. After all, the revitalization of Main Street along the 500 and 600 blocks — branded the “Creative Corridor” — seems primed to encourage foot traffic, not to mention potentially attracting the sort of loft tenants who’d be inclined toward a season subscription for the professional theater a few yards away from home. Plus, The Rep had finally secured its Education Annex at 518 Main Street, from which an enthusiastic, highly trained staff conducted its education wing, which Bush pointed out was a chief passion for The Rep's board members. "We're a nonprofit theater," Bush reminded us. "So we do things for reasons other than money." The Annex, as it's called, is also where The Rep held its “alternative” Christmas production, David Sedaris’ cult classic, “The Santaland Diaries.”


In fact, though, a bigger property footprint was a considerable factor contributing to The Rep’s decline. “We own four pieces of real estate downtown,” Bush said, “and we have those appraised somewhere north of $6.5 million. Our secured and unsecured debt is just over $2 million. So we’re real estate rich, and cash poor.”

In addition to the theater, The Rep owns two apartment complexes (the “Peach Tree” apartments at 315 East 6th St. and “The Ivy,” as Bush called them, at 519 East 6th St.) It uses the properties to house acting talent during productions.

There's also a scene shop on State Street it uses to store and build pieces like the gorgeous baby-blue-and-gold-trimmed interior it used for the entirety of this season’s Moliere remix “The School For Lies.” (To great effect, I might add.)

“What we learned five years ago,” Shepherd said, after a consultant helped the Rep assess its financial situation, “was that if we didn’t have any property debt, we could kind of make things work on stage.” Property requires maintenance.

On the other hand, Little Rock isn’t like New York City or Chicago; recruiting talent commensurate with The Rep’s standards means you’ve got to house that talent somewhere during the rehearsals and for the length of the show. “We realize that we have significant holdings for a theater our size,” Bush said. “The maintenance associated with that is one of our biggest challenges. But it’s critical to what we do because we can’t bring people into town if we don’t have a place for them to sleep.”

The “drain” of those property holdings, Shepherd added, is why the board launched “a big capital campaign.”


That campaign, Bush said, was called “Our Next Act,” and it was what the board had hoped could stave off this financial pickle. “Our initial goal,” he said, “was to raise $5.3 million, which was going to allow us to pay off all debt related to our facilities and capitalize our theater to a fashion that has never been enjoyed in the past. We have raised $1.7 million toward that, but the declining attendance numbers this year simply devastated our cash flow.”


Another factor depleting revenue, emphasized in the press release and by both Bush and Shepherd, was what Bush called “a change in the theater landscape in Little Rock.” With the re-opening of Robinson Center Performance Hall after a renovation (“It’s got that new car smell,” Bush said), big-budget shows from Celebrity Attractions — like “The Lion King” — are selling out. That, along with growth in the area’s community theater offerings, Bush said, means theatergoers have more choices.


So what does The Rep look like at 43 years old? Shepherd, who told us she’s acted on the board intermittently almost as long as The Rep has existed, will assume her role as board chair July 1. What, exactly, though, will she be overseeing, if operations are suspended?


In upcoming months, a committee of board members and past board members will evaluate the future of the theater and try to fundraise to relaunch it.


“Going forward from here,” Shepherd said, “we’re going to involve all of the staff members … give them an opportunity to give their best ideas." The committee will also engage "folks from the community [to] give them the opportunity to tell us what they love about The Rep, what kind of shows they want to see.”

Then, The Rep’s website says, in mid-August, the company will announce a plan for “Our Next Act.” That might mean The Rep sells one or more of its property holdings — though it’s clear that relinquishing any of them would change their current production model — or that the season takes a different shape in The Rep’s future. It might mean that, like theaters in other small-ish cities, The Rep collaborates with colleges or universities to share performance space.

“Everything is on the table,” Bush said.


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